Winning the Healthcare Cost Battle at the Margins

According to Kaiser Family Foundation, 20 percent of mem-bers drive 82 percent of medical and prescription healthcare costs. Lowering healthcare costs is a priority for employers and our nation. Putting focus on the small percentage of the population that drives the majority of those costs will have the most impact on lowering total healthcare costs for employers and help in improving the health of employees and their families. 

Most people in this costly segment have chronic conditions such as diabetes, hypertension, cardiovascular disease, COPD, etc. Recently, specialty conditions (e.g. inflammatory diseases, hepatitis, cancer, etc.), with low utilization but high costs, have taken a more prominent role.

Abundant media coverage has increased awareness on rising drug costs, but not enough consideration has been given to the root cause of the problem—helping patients manage their costly condition(s) … which reduces both medical and prescription costs. 

Chronic conditions represent 86 percent of total healthcare costs. According to the Centers for Disease Control and Prevention, chronic conditions are the leading cause of death and disability. Fifty percent of U.S. adults have one chronic condition, 24 percent have two or more. Spending is twice as much for those with one chronic condition, six times more for those with three and almost 14 times more for those with five or more. Eighty-six percent of all health care spending is for people with one or more chronic conditions. These high cost, high-risk patients strain the budgets of patients, their families, insurance plans and the healthcare system.

People with chronic conditions have complex health needs. As a result, they require more health services. These patients see multiple doctors, go to multiple pharmacies and take multiple medications, all with unique instructions. The average Tria Health patient takes 8-10 prescription medications and an additional two or three over the counter medications. Keeping track of all of the relevant information is challenging for any-one. Knowing whether or not the medications in combination with one another are effective or will have negative interactions can be costly; not knowing could be dangerous. 

Unfortunately, since these patients see multiple doctors and go to multiple pharmacies, they don’t typically have time to discuss all of their medications (prescription, over-the-counter, supplements) with their healthcare provider. Research has shown that 50 percent of people don’t take their medication as prescribed, which is called non-adherence. When patients aren’t adherent, they incur additional healthcare expenses that can be avoided, such as increased hospitalizations, emergency-room and urgent-care visits and more.  

For an employer with $1 million in annual claims, poor adherence can generate avoidable healthcare spend of $100,000, or 10 percent of total spend.

Chronic condition management, however, can help solve the problem. Since medication is required for effective con-dition management, a pharmacist who is a medication expert is uniquely qualified to work with patients individually through one-on-one consultations to help patients better manage their conditions. Chronic Condition Management (CCM) is pharmacy care that is centered on the patient, not just the disease with a focus on increasing patient engagement and a goal of delivering measurable improved health outcomes.  

Under the CCM model, pharmacists work one-on-one with patients to discuss their medication and lifestyle habits. They develop personalized care plans for patients to follow and provide coordination of care with a patient’s doctor. This additional support im-
proves health and reduces costs for patients and their employers. This solution is distinct from medication dispensing or disease management, which is a single condition approach. It is also a more comprehensive approach than traditional medication therapy management (MTM) solutions because the focus is on increasing patient engagement, delivering and proving an improvement in health outcomes.

Improving health outcomes for pat-ients will lower overall health care costs. However, demonstrating a return on investment can be challenging. Realizing cost savings from improved health outcomes takes time and data—one to two years and potentially mul-tiple data sources. However, more recently, a growing body of evidence from government run MTM programs have proven that effective condition management improves health for mem-bers and control costs for commercial employers and health plans.